MediaTek Inc (聯發科), the world’s top 5G smartphone chip supplier, yesterday retained its upbeat forecast for this year and next year due to 5G’s rising uptake, shrugging off a brief disruption to production linked to COVID-19 infections at its local chip testing and packaging partner.
MediaTek’s remarks came after a shareholder at the company’s annual general meeting voiced concern about a ripple effect caused by the infections at King Yuan Electronics Co (KYEC, 京元電子).
KYEC halted production at its factories in Miaoli County for two weeks last month and lowered utilization for the remainder of the month to stamp out an outbreak at its factory in Jhunan Township (竹南).
Photo courtesy of MediaTek Inc
“Based on our management team’s evaluation, the impact should be short-term. [We] expect a gradual recovery from the third quarter,” MediaTek chairman Tsai Ming-kai (蔡明介) said.
Responding to another shareholder’s concerns about a lukewarm recovery in China’s smartphone market, Tsai said MediaTek did not expect weakness in any market, or its consumer electronics segment to impair its business significantly, given its diverse product portfolios.
“We still have a positive business outlook for this year and next year as the company sees growth from smartphones, TVs, tablets, Wi-Fi and ASIC [application-specific ICs],” Tsai said.
Revenue would expand more than 40 percent this year, from NT$322.1 billion (US$11.54 billion) last year, as projected in April, due mainly to the increasing uptake of 5G smartphones, MediaTek chief executive officer Rick Tsai (蔡力行) said.
Gross margin would improve to between 44 and 46 percent this year, he added.
As the world ushers in the 5G era, the uptake of 5G-enabled devices, including smartphones, is gaining momentum, with China having the fastest uptake, Tsai Ming-kai said.
Demand would pick up gradually after the US and European economies reopen as the COVID-19 situation eases, he said.
MediaTek forecast that the global 5G smartphone market would reach 500 million units this year with China contributing 300 million units.
Aside from 5G smartphones, MediaTek also reported growth from customers’ market share gains in the 4G phone segment in emerging markets from Southeast Asia and India to Africa, Tsai Ming-kai said.
Shareholders yesterday approved a planned cash dividend distribution of NT$21 per common share, representing a payout ratio of 80.73 percent based on the company’s earnings per share of NT$26.01 last year.
Shareholders also approved a plan to pay a cash dividend of NT$16 per common share each year over the next four years.
KYEC yesterday reported that its revenue dropped 30.77 percent to NT$1.98 billion last month from NT$2.86 billion in May, closely matching the firms’ estimate due to temporary factory shutdowns.
KYEC reported NT$7.6 billion in revenue for last quarter, little changed from NT$7.63 billion in the first quarter.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure
RSS